People in developing countries have less money to spend. Conventional wisdom says that these same people, when given the option, will always choose products that cost less. But is this true? In the quality vs. cost decision does cost always win out?
To put it bluntly, No.
Similar to their counterparts in more developed nations, consumers in fast growing economies like Southeast Asia value quality and put a high premium on well-known brands. Instead of being focused on the cheapest goods, consumers prefer products that provide the most value.
Customers outside the U.S. pay attention to packaging first, quality next and price last. Set your priorities accordingly. - MarketingProfs
Attractive packaging, reliable customer support, a strong warrantee, and findability – the ability for consumers to find your products with relative ease – are all factors that are often just as important as the price of a product. Not only is it a morally-suspect practice to sell shoddy goods, it’s a financially unsound one too.
Quality vs. Cost vs. Branding
Products that have a non-local origin also tend to fare well in developing countries – provided that it’s abundantly clear that the product is foreign. In fact, the strength of this nonlocal brand preference can even outweigh the importance of quality.
Consumers in developing countries, for reasons that go beyond brand quality assessments, prefer brands perceived as having a nonlocal country of origin. - Study on Product Country of Origin
A study published in 2000 shows that brands sourced from Western countries endow prestige and enhance the buyer’s social identity. The study also shows that brand recognition and the perception of a brand as being foreign are 3x more important than price.
Competing based on price is a losing strategy. Fortunately, it’s also completely unnecessary. It’s far more important to develop a marketing strategy that highlights quality vs. cost and promotes brand recognition. Better products. Better relationships. Better business. It’s a win-win-win!
Lief International currently exports to Southeast Asia. If you’re a USA manufacturer with a superb product and want to get in on the ground floor, don’t hesitate to contact us.